New: TRENDS 2012 Factors of Influence Report
Measuring the effectiveness of lobbying firms we hire on behalf of our associations for legislative and regulatory advocacy is difficult. Sometimes we pick a firm because we personally know a lobbyist there. Or we hear the firm is effective from a confidant. Other times we want to augment the political background of our association team with a lobbying firm that has ties to the opposite party of our association CEO, senior leadership or head of government affairs. Still other times we want to impact a particular member of Congress so we hire a lobbyist who is a former staffer of that member. There are dozens of subjective criteria association leaders use to choose a lobbying firm. But is there a more objective way to determine the effectiveness of a particular lobbying firm beyond street chatter or the perception of influence?
Other highly respected publications have looked at measuring the influence of lobbying firms over the years. National Journal compiles a list of “Top Lobbyists” primarily using three variables: the amount firms were paid, the number and diversity of clients, and the number of Fortune 100 clients. Similarly, the National Law Journal produces a list that looks at lobbying firms and law firms and putting emphasis on total revenue of at least $7 million. Both are interesting but are more limited in their scope of defining true influence, and inevitably favor larger firms.
Creating a more comprehensive model
Association TRENDS and the Graduate School of Political Management at George Washington University embarked on a method this year to measure influence that might provide the association world with a more objective tool to determine what lobbying firm will be an outstanding partner in the legislative/regulatory influence arena.
Since 2010, Association TRENDS has performed analyses of government affairs firms on several “factors of influence” to help determine the firm that is the most influential with respect to public policy. This year’s Factors of Influence report represents a significant improvement over past years, with many more factors being considered and a more robust, nuanced approach to data analysis.
We looked at earlier reports and added more variables that we believe contribute to the firm’s overall level of influence, using the extensive political database at Lobbyists.info. For 2012, the government affairs firms were scored on 12 factors of influence, including conventional metrics like total income and number of clients, as well as a host of more robust metrics, some of which will be detailed in this article. Each factor was weighted according to relative impact. Here, we just want to provide a 30,000-ft. explanation of the results. A more thorough and detailed final version of the report will be released later this month. (See list of the top-scoring firms, left.) The largest firms
The Factors of Influence Report takes into account the total income, total number of employees, and total number of active clients for each firm. The firms with the highest scores in these areas historically tend to be similar, with Patton Boggs LLP taking the highest position in each. These factors are valued because a high level of resources, both monetary and human, allow for high capacity for a firm to be influential in government relations. Similarly, a large number of clients suggest high prestige in the government relations industry.
Robust analytical data
To obtain a full picture of a firm’s influence, we needed even more robust data analysis. One important factor was the firm’s weighted average percent of clients’ lobbying spending. To arrive at this value, the percent of client spending on every firm of that client was taken, and these values were averaged to arrive at an average value of client spending for each individual firm. Then these averages were weighted according to the total number of lobbying contracts for each firm, because it is more impressive if a firm can maintain a high percentage across a large number of contracts. This factor represents the extent to which a firm constitutes a large percentage of its clients’ lobbying spending, the implicit logic being that the larger the portion of lobbying work that a firm performs for its clients, the more those clients are relying on the firm for their government affairs. The Ferguson Group, LLC has the highest value in this factor.
Another interesting factor was the concentration of highly paid personnel in a firm’s population of employees, or the ratio of the firm’s income to its employees. This is an effort to give advantage to firms with a larger majority of highly effective government affairs employees (assuming more highly paid lobbyists are valued and smaller ratios signal a commitment to government relations by the firm). Not surprisingly, this factor tended to aid smaller firms more than larger firms. The study shows high income firms tend to have much lower concentration of highly paid staff.
Unquestionably, alumni of Capitol Hill make the firm more influential. Experience on a congressional staff or being a former member of Congress strengthens the understanding of the process and personal relationships are likely deeper. Former members of Congress and staff are often able to better understand the verbal and nonverbal signals from Capitol Hill staff having observed or used the signals themselves. Moreover, calls are often returned more quickly, meetings are easier to obtain, and the overall level of trust between current congressional staff and former members are higher with Hill alumni.
More insights
2011 was a year of slight decline for the government affairs industry, with income levels sagging across all firms. However, the data suggests that firms are rebounding in 2012, with a majority of firms exceeding half of their total 2011 income in the first two quarters of 2012.
Other aspects of the government affairs industry remain unchanged. For example, the majority (59 percent) of government affairs work occurs in the Washington metropolitan area, with 41 percent of firms having no Washington operations.
This report is based on the database of Lobbyists.info, a political information database that has been developed for more than 40 years, as well as multiple surveys of the political community, professional and trade association research, quarterly lobbying disclosure forms and extensive legislative research. The full Factors of Influence 2012 Report will include much greater detail in all 12 factors of influence, and will be available soon in the Executive Toolbox on the TRENDS homepage.
As we continue to build the model, we hope this analysis will help you and your association ensures you are getting full value for your advocacy investments and generating the return you expect for your association members. Rehr is an adjunct professor at the Graduate School of Political Management at George Washington University and former CEO of the National Association of Broadcasters and the National Beer Wholesalers Association. He can be reached at davidrehr@gwu.edu. Columbia Books senior editor Duncan Bell contributed to this article.
